New Expat Rules Could Lead to Indonesia Property Boom

Submitted by admin on Mon, 19/11/2012 - 19:09

One of the biggest trials facing expats is the hurdle of investing in property in their new country of residence. New rules set to come into force in Indonesia could turn the whole property market on its head.

In many countries especially in the developing world expats are forbidden from owning local property. However, with Thailand a key example, countries in the region are increasingly offering expats the opportunity to own their own home in the hopes of boosting the flagging local property market.

Under the new regulations foreigners would be allowed to purchase a Building Ownership Certificate (SKBG) that would be separate from land rights.

Neil Jensen, Asian head of operations for property experts Fraser & Co, told The Telegraph, “Currently the law is very similar to that in Thailand whereby your only opportunity to own property or land is if it is bought in the name of a local national – typically a spouse or close friend.

“The new ruling will apply to specific buildings and at this stage it is only likely to be available in Jakarta, Bali and Batam with a further caveat that foreign ownership of any qualifying building will be capped at 40 per cent.”

Ferry Salanto, Colliers International associate research director, added, "I think expatriates would contribute more to the state income through taxes if they were allowed to actually own the apartments.”